Pioneer Foods and Foodcorp have been referred to the Competition Tribunal for their alleged role in a bread price-fixing cartel, the Competition Commission said on Wednesday.
The two companies could be fined 10% of their annual turnover for the 2006/2007 financial year.
This followed an investigation into certain firms, including Pioneer Foods and Foodcorp, suspected of fixing prices for bread in contravention of chapter two of the Competition Act, the commission said in a statement.
Other companies included Duens Bakeries, Premier Foods, trading as Blue Ribbon Bakeries, and Tiger Brands, trading as Albany Bakeries.
Premier was granted immunity from prosecution because of its cooperation with the investigation and its confession of its role in the cartel.
Tiger Brands also decided to cooperate with the commission culminating in its admission of participation and a fine of over R90-million. The company also assisted the commission in further investigations and in the prosecution of other members of the cartel, Pioneer and Foodcorp.
”Despite the admissions of their co-cartel members and information about their senior employees participating in meetings where prices of bread were fixed and markets allocated being presented to them, Pioneer and Foodcorp have denied any wrongdoing,” the commission said.
The matter had therefore been referred to the tribunal for adjudication.
The commission has requested that the tribunal find that Pioneer Foods and Foodcorp had contravened the Competition Act, that it direct Pioneer Foods and Foodcorp to stop fixing bread prices and allocating markets, and levy an administrative penalty on each of the first and second respondents of 10% of their annual turnover for the 2006/7 financial year.
Pioneer and Foodcorp had 20 working days to file responding affidavits and thereafter the tribunal would hold public hearings into the matter.
In a statement on Wednesday, Pioneer Foods said it received the referral from the commission on Tuesday.
”Pioneer Foods and its advisers are studying the contents of the referral and will respond to the Competition Commission in the next few weeks in terms of the referral,” the statement said. — Sapa